Getting children to school safely and reliably is a challenge as old as public education itself. But rarely have any entrepreneurs tackled the problem of updating and optimizing one of the nation’s largest legacy transit systems, now nearly a century old. It’s still common to find people at U.S. student transportation hubs speaking into walkie-talkies and wrangling clipboards as they sort passengers into gas-guzzling yellow buses.
Ritu Narayan was working as a product executive at eBay when her two children began attending school. Finding safe and reliable options for getting them to campus was sometimes so difficult that anytime those options would fall out, she would be on the verge of leaving her job.
“We had the minimum viable product, which we expanded upon, built the entire platform, and we kept on going to better places with our solutions.”
Bearing in mind that her mother in India had set aside a career to raise Narayan and her three siblings, she founded Zūm in 2016 with brothers Abhishek and Vivek Garg to optimize routes, create transparency and make school commutes greener; since then, Zūm has operated in several California districts (including San Francisco), as well as in Seattle, Chicago and Dallas. In Oakland, Zūm has optimized routes to reduce the previous bus requirement by 29 percent, with the balance being serviced by midsized vehicles.
Zūm also plans to have a fleet of 10,000 electric school buses by 2025 and is partnering with AutoGrid to transform that fleet into a virtual power plant with the potential capacity to route 1 GW of energy back to the grid.
To get a deeper look into the startup’s plans and hear what Narayan has learned from its journey so far, we discussed the pandemic’s impacts on Zūm’s development, where she thinks the company will be a year from now, and how she convinced investors to back a business model that embraces accessibility and equity.
(Editor’s note: This interview has been edited for clarity and length.)
How did COVID-19 affect your business? What percentage of your business is back now?
It’s funny, because we used to say that student transportation is a recession-proof business, and no matter what, kids are still going to go to school, but the pandemic was the first time in probably the last 100 years when kids across the globe did not go to school. It was an interesting time for us, because overnight, all the rides were closed and we had to focus on what was needed immediately to support our districts and students.
We realized that the school is such an important physical infrastructure that’s not just for education, but students get meals there as well as physical and emotional help. So we helped the school districts with reverse logistics, taking the meals or laptops from the school districts and delivering them to homes, because our software could handle that kind of thing. That was just an interim to make sure the communities settled. Starting last year, rides started coming back around 30%, and this year starting in April, it has been 100% back in the business.
Structurally, on our end, we devoted this time to focus on serving the larger districts and full contracts. We took time to build that technology toward it, so this has been a very good transition for us.
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Your service also helps provide transport to at-risk kids. How significant is equity and accessibility in the way you model your business?
Accessibility and equity is a big part of transportation. It’s an equalizer. Like, one person having a ride versus another person not having a ride is the difference between attending a program and not attending it. That’s why public school districts like to partner with us, because kids have different needs; they have different interests in different subjects, and they have to attend the classes in different schools within a district.
Districts are pretty massive. The San Francisco Unified District has 150 campuses across a 40-mile city. So, for our purpose, we can let students travel and essentially do any special programs or access any kind of services in terms of quality. It’s also about being able to provide door-to-door services with smaller vehicles when applicable.
You’ve raised about $71 million to date, and you’ve been funded by big names like Sequoia Capital, Spark Capital, BMW, Volvo. Are you profitable yet?
We are going to be profitable in a couple of years.
Are you planning on expanding into any other business lines or pivoting at all?
This year, the focus is to bring our full-service transportation to more school districts across the country. Electrification is a big goal for us. Electric vehicles on their own cannot be profitable, and you need a system like us or a platform like us that can reduce the cost by removing inefficiencies in the system. So electrification and our platform pretty much goes hand in hand, and we are strongly committed to making both happen successfully.
Actually, Biden has an infrastructure plan and school electrification is a big part of it. They are planning to allocate around $25 billion to electrify school fleets, and a service platform like ours is needed to make it happen, and make it viable from a cost perspective for the school districts.
How do you think your past business decisions, as well as being a parent, have influenced your current strategy?
I started my career in management consulting early on at PricewaterhouseCoopers and helped streamline processes for large Fortune 500 businesses, and then I built large-scale products for companies like Oracle and eBay. So, I have a product mindset. When I see a problem, I always look at what’s the best way to solve it — not just in the isolation of the micro level, but at the macro level. How would the user use it, how would the market adopt it, what would be the obstacles to it being a large-scale distributed solution?
So I’ve had that mindset from day one, and that’s why we were successful early on. We had the minimum viable product, which we expanded upon, built the entire platform, and we kept on going to better places with our solutions.
In terms of parenting, my children use Zūm four times every single day. They provided feedback and were the early users. That led us to make sure that we are taking feedback on an ongoing basis. After every single ride, parents rate their experience with the driver, and we use that experience to refine our services in a very consistent manner.
Prioritizing children seems to be rare in Silicon Valley. Do you think the startup world has left out parents and children from their problem-solving missions?
I’m by qualification a computer engineer, and it’s a little off-point, but in my college, there were just six women out of the 300 students. And when I started working in technology, it was pretty much the same, and you just assumed this is the way it’s supposed to be. Then, I landed in eBay, and 42% of employees there were women. Anyway, eBay used to do a lot of sessions, and one day we had an expert who had written a book saying that if 50% of the global population is women, we should design with them in mind.
It was just an “Aha!” moment for me, because I had pretty much assumed that’s how things should be or that’s how they are, and I was like, “She is so right.” That might have instigated me to change the philosophy and ask myself why I accept the solution provided if there’s a problem in plain sight and you have the power to change it using technology.
We hear stories from parents who tell us that they went back to the job or they got promoted on the job because they started using Zūm. People used to say, “I always go to work at six o’clock and I leave at three o’clock. Nobody notices me as I go in at six o’clock, everybody knows when I leave at three o’clock.” And just by making sure Zūm could pick up the kids and they can leave at the normal time, it made a big difference to their career.
Your mother had to give up her career to take care of you, and you also took some time off your career to attend Stanford Business School where you incubated this startup. Do you have any advice for women or parents who take time off and get back into work?
First of all, those boundaries don’t exist anymore in this digital and location-fluid world. Women should absolutely take a break without worrying about coming back to the world. Nowadays, you can continue to build and transition. There are many Twitter groups and online interest groups that you can join so it doesn’t feel like you’re taking a hard break — you’re still learning and able to transition easily.
In fact, you can do it even more powerfully because you can pivot. You can see what you want to do next and start contributing. It’s a very different era — employment and jobs are fluid, the boundaries are fluid. People don’t look at a straight-line career progression, which is just a ladder. It could be exponential; you could take a couple of steps back and then grow rapidly. So, it seems possible in today’s world and technology has enabled it.
When you were first looking for funding, especially with VCs, did you find it tough to convince people that there would be a return on investment?
In general, there is a bias. There is a Harvard study that says women are always asked limiting questions when they go in for funding or investment. Like, “Why would this thing not fail? How will you make sure that my money doesn’t go down the drain?” But to the men they ask, “How big could you get? What could you do with it? Could you tell us the best scenario?”
And just by framing the questions in the meeting, they get different answers, because in one case, you’re defensive immediately.
A lot of people used to say at that time in 2016, when Uber was at its peak, “Oh, Uber could do this any day.” They didn’t realize you have to build the solution from the ground up. Uber would not be able to do it because of their brand, their perception and the nature of the transaction. So initially, we did have to learn how to present better.
Very early on, I found women who were high-performing executives, and one of them, she was second counsel at Google, and as she was raising kids, she immediately got the problem and she became my biggest seed investor. Later on, she introduced me to Sequoia Capital and they immediately understood the problem. This is one of those problems that people just get, but they have to look at it without bias in terms of who’s doing it.
Once I got the first funding round, there was no looking back. Today, whenever I pitch, in five minutes, people are pitching me back — like, how great it is and how the solution is going to change the communities. But yes, the first few times can be hard.
What surprised you along the way?
How hard it is to build a company! It is not just about your product, because there are so many factors in terms of how you build your go-to-market, how you expand that people and culture aspect, as well as the scaling aspect.
It was surprising that building a company is a hard endeavor. At the same time, it’s very satisfying, because at the end of the day, customers use your product every day and they think their life has been transformed just because you did it. And those kinds of things keep you going, like the impact you’re making and the lives that are transformed by the touch of your product.
Where do you expect Zūm to be a year from now?
A year from now, I would expect we would have expanded and made our service available to more districts, and we would have made significant progress in our goal of sustainability and electrification in general.